A lot of investors I talk to are so discouraged by the mess the American economy is in that they're looking to put all their money overseas. Doesn't matter where. As long as it's not America.

That's a real mistake. It's a form of myopia. Sure we've got problems. But because we all live here, we see those problems up close and personal. What we don't see is that right now everyone has problems. It's just that the problems in other economies seem smaller because they're farther away.

So if you invest outside this country -- for no better reason that it's not here -- then you're at risk of going from the frying pan into the fire, without even realizing it.

Look at what's happening now with Greece. Sure, you're probably not investing in Greece. You're investing in Europe! And you're telling yourself you're okay. You're not. The problems in Greece are revealing deep problems in the very structure of Europe -- problems that have been there all along, waiting to bite investors in the butt, but you weren't aware of them because Europe is so far away.

Let me explain.

We know that the problem with Greece is its government debt, and the debt is growing every year because government spends more than it collects in taxes. The risk is that investors will shun Greek government bonds, sending interest rates sky-high, making the problem even worse. The endgame would be default on Greece s sovereign debt.

Unthinkable? You're not trying hard enough. Try this on for size. Since Greece won its independence as a nation 180 years ago, it has been in some form of default on its government debt more than half the time. So what are you going to try to tell me? This time is different?

Oh sure, sure. This time there's the European Union making sure everything will be OK. They have a common currency, the euro. They have rules. Right? Wrong.

The rule for a nation to qualify for use of the euro is that is has to have a budget deficit of no worse than 3% of gross domestic product, and an accumulated debt of no more than 60%. But get this. Greece joined the currency union in 2002 -- and in every single year, from 2002 through the present, it has been in violation of the rules.

Why was Greece admitted to the euro in the first place? Who knows? No doubt the bureaucrats who dream of a Europe with the size, scale and interconnectedness of the United States just couldn't resist. And now they're paying the price.

What exactly is the price? How much will it cost for Europe to bail out Greece, and how will it be accomplished exactly?

Nobody really knows, because Europe isn't saying. They keep uttering vague reassurances, but no actual commitments.

Why? Because bailing out Greece is illegal. It breaks the rules every bit as much as admitting Greece in the first place. But now the whole world is watching.

I say it's illegal because the treaty that formed a United Europe -- the so-called Maastricht treaty -- specifically prohibits one nation, or any combination of nations, from taking on the obligations of another nation.

So how does this play out? Sounds like a lose-lose deal, if you ask me. One way to lose is to let Greece go down the drain -- a sovereign debt default right in the heart of unified Europe. The other way to lose is to save Greece, in plain violation of Maastricht. What's that going to do for confidence -- to tell the world that none of the rules really apply?

But it doesn t matter, you say. Things are rotten in here in America, but Greece or no Greece, Europe is out of recession and growing again. Not! Real GDP growth in Europe was 0.1% in the fourth quarter of 2009. That's right.

One tenth of one percent. Basically zero. No growth at all. We call that a recession.

But in the U.S., in the same quarter, real growth was 5.7%. That's practically a boom.

How about Japan? Surely it's doing better than the US. Not. Reported real GDP growth in the fourth quarter in Japan was 4.6% -- less than the U.S. But in Japan, you absolutely cannot trust the numbers. Growth in the prior quarter was originally reported at 4.8%. Last week it was revised down to zero.

We have revisions to U.S. economic data, too. But nothing as extreme as that that. Ever. What you see is pretty much what you get.

Now it's time for you to play your trump card: China. Yes, China is growing much faster than the US. For the whole year 2009, growth was better than 10%. But you can do remarkable things when you have $2 trillion in government savings, and are willing to spend big chunks of it building whole new cities with no one to live in them and nothing to do there if they did.

Besides, if things are so bad in the US, Europe and Japan, how is China going to make it in the long run? It's a totally export-based economy. Without other healthy nations to buy their exports, where's the money going to come from?

I guess this isn t the best advertisement in the world for investing in the US. Basically all I've done is try to convince you that everyplace else is in bad shape, too. Maybe worse.

The reality is that this is a difficult time for the world economy. We're struggling to come out of a deep recession, and a global credit crisis the likes of which we've never experienced before.

It'll all turn out OK, if you're really patient. All I'm saying is that you're making a huge mistake if you mindlessly send all your money overseas -- just because all those other economies are the devil you don't know. The devil you do know may be your best bet.